By 2030 Solar-Powered Hydrogen Could Be Cheaper Than Fossil Fuel-Based Production

Researchers have predicted the price of green hydrogen to fall to $2.50/kg or less by 2030

September 26, 2020


Hydrogen produced from solar-powered equipment could be cheaper than fossil fuel-based production methods in a decade, indicated a study.

The study, by researchers from the Massachusetts Institute of Technology, was recently published in Cell Reports Physical Science.

Hydrogen produced from natural gas with carbon capture and storage is blue hydrogen, while that made from renewable electricity is green. However, hydrogen gas is colorless.

Researchers predicted the price of green hydrogen to fall to $2.50/kg or less by 2030.

The study assumed lower projections of 2030 costs and efficiencies of technologies for photovoltaic, electrolysis, and hydrogen storage. They identified a set of sunny United States locations and plant configurations that could supply industrial-scale quantities of hydrogen round-the-clock at costs at or below $2.5/kg.

The study predicts that the cost of electrolyzer – a critical component for producing hydrogen, would reduce by 28% and 62% compared with current prices for multi-megawatt systems.

Researchers assumed the efficiency of electrolyzers to increase by 20%–28% beyond current levels in 2030.

The paper assumed that the availability of geological hydrogen storage facilities would increase. Such facilities enable low storage costs but also provides sufficient storage capacity to support supply for industrial demand. Given the historical cost trends of photovoltaic cells, researchers assumed its capital cost at $500/kW DC.

They prepared a solar power-based hydrogen production model involving power generation components not connected to any grid. The power network, for the study, was not allowed to sell excess power or buy electricity when the sun is not shining.

“These findings are made possible by the integrated design approach used in this study; notably, the costs would be considerably higher if one used the same technology cost and performance assumptions but did not optimize an individual component size,” the researchers said in the study.

The paper quantified the levelized cost effects associated with choices inherent in electrolyzer design, such as increasing efficiency versus decreasing capital costs and comparing them with changes in prices and performance of other equipment; namely, the costs of photovoltaic cells and energy storage.

Recently, a hydrogen production and adoption model prepared in the U.K. suggested that hydrogen could solve its power storage issues.

Electricity generated from offshore wind projects can be used to produce hydrogen by electrolyzing seawater. Hydrogen can be transported through pipelines and stored to produce more electricity later when renewable power generation dips. Hydrogen can also be used in industrial heating applications and transport. It could be one of the least-cost pathways to reducing carbon emissions.